Editorial: Not So Fast on New Tax Giveaways

“I’m not saying fraud is rampant in the program,” Robert DeLeo was quoted as saying recently in the Chelsea Record. “It’s of a small nature, but what we want to do is tighten up the restrictions during the budget process. When we have to cut other programs that are important to us, any time we can find waste and fraud and run a program better, we have to take advantage of that. I think this is one program that cries out for some reforms.”

That’s the Massachusetts Speaker of the House, making a headline-driven promise to get tough on alleged abuses by recipients of welfare cash benefits. Anecdotes refer to people spending cash on anything from tattoos and booze to bail money and lottery tickets.

By all means, let’s crack down on any abuses of public funds. But let’s not limit our concern to welfare cheats.

Conversely, DeLeo is pretty generous when it comes to corporate giveaways, most recently with his proposal creating a new $50 million innovation investment fund to support research and development. Massachusetts has a long history of giving troublesome tax credits and breaks to big business, a history that is worth equally close scrutiny by Beacon Hill politicians.

Look no further than Curt Schilling for reasons why the public should be skeptical about diverting taxpayer money to business ventures.

In 2010, the former Red Sox pitcher and anti-government blowhard went to Rhode Island promising hundreds of good jobs, millions of dollars in tax revenue, and entry into the booming business of video games. Rhode Island offered a $75 million loan guarantee to lure Curt Schilling’s 38 Studios to Providence.

Since then, Schilling’s company defaulted on a $1.1 million payment to the corporation, and Rhode Island has to decide between giving the company additional taxpayer support or face the possibility of being stuck with the company’s debts should it collapse. As for all those jobs he was going to create, Schilling had to lay off the entire staff, 307 workers in Rhode Island and 106 employees in Maryland.

Schilling is hardly the lone poster boy. As the Boston Globe pointed out recently, politicians make lousy venture capitalists. High-profile flops include alternative energy firms Solyndra LLC in California and Evergreen Solar in Massachusetts, both of which went bankrupt in spite of millions of dollars in government support.

Massachusetts grants some $26 billion in tax breaks, deductions and outright expenditures that get little to no review. Examples include life science industry tax credits and the infamous film tax credit, and once they are on the books, they generally stay on the books. Yet Beacon Hill is preparing another state budget that will further cut human services, early education, and safety net programs.

If DeLeo and his fellow legislative leaders want to make sure every taxpayer dollar is spent wisely, they’ll need to take on the corporate giveaways that seem too easily available on Beacon Hill.

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